Panasonic Expands Its Toughbook Channel

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Ruggedized notebook maker Panasonic Computer Solutions Company (PCSC), is working on making its channel as tough and as light as its mobile PCs.

PCSC, the Secaucus, N.J.-based developer and manufacturer of the Toughbook line, outlined its product and channel plans at its eighth annual Panasonic TP3 Summer Session, held this week in Phoenix.

It's comforting to attend the session and see Panasonic's yearly re-dedication to the channel, said Dennis Scott, president of Surface SystemsInstruments, a Mill Valley, Calif.-based developer of road construction test equipment and reseller of Toughbooks to customers in that vertical market

"The company could try to go to the consumer electronics market to build sales volume," Scott said. "But it's nice to come here every year and see their commitment to us."

Rance Poehler, president of PCSC, opened the conference with his e-mail address and the words "Welcome Friends" on his opening PowerPoint slide, along with a reminder that he welcomes solution providers to e-mail him directly when they have issues with his company.

"Please write down my e-mail address," Poehler said. "I feel close to this group. You keep me on my toes. This is one of my favorite things of the year, standing in front of you.

Poehler told the over 200 attendees of the conference, representing 56 solution provider companies and 21 technology alliance vendors, that PCSC expects revenue in 2007 to hit about $700 million, up from $600 million last year.

That puts the company in a tug-of-war with Hewlett-Packard for the position of second-largest or third-largest mobile PC vendor, behind leading vendor Lenovo, which nearly three years ago acquired the ThinkPad division of IBM, Poehler told the TP3s. TP3 is the company's acronym for Toughbook premier partner program and also is how it refers to its solution providers.

"We have 275 TP3s," Poehler said. "That's an average $2.5 million opportunity per TP3."

However, Poehler said, PCSC is only number five in terms of volume. The difference is that the average selling price for a Panasonic Toughbook is $2,726, little changed over the past four to five years, compared to HP's $1,134, a figure that has been steadily dropping.

Poehler used that comparison to push partners to sell more Toughbooks. "Would you rather sell a $1,000 unit whose price is always going down?" he said. "Or a higher-priced model with higher margins?"

In order to sell more of those higher-priced Toughbooks, PCSC is recruiting solution providers and offering new channel incentives, said Sheila O'Neil, PCSC's senior director of channel sales.

At the same time, the company is in the process of de-authorizing a large number of inactive partners, O'Neil said.

PCSC, which has consistently sold only through the channel in the 15 years or so since its founding, wants to recruit new partners who can bring the company incremental business, O'Neil said. "We're not looking for those who only respond to bids," she said. "We want partners who can go out and sell a solution."

PCSC, whose channel is segmented by vertical markets such as government, medical, and utilities, is especially interested in recruiting partners who can add value in vertical markets where the company currently does little business, such as construction and mining, O'Neil said. "Especially mining, where customers face unique issues such as (Underwriter's Laboratory) UL 1604, which deals with sparks in explosive situations," she said. "We just introduced two new models for this space."

Some solution providers new to PCSC who have a pressing opportunity can get immediately approved by a company field sales manager, O'Neil said. "But we'll check to make sure they're not just responding to a bid," she said.

Recently, however, PCSC has been tightening up on its channel. It has in the past few months de-authorized 75 partners, and during the month of September will ask all its partners to re-sign with the company, O'Neil said.

"Those who were de-authorized weren't performing at all," she said. "So we know they are not at all interested. When we have them sign up again, we'll find some are not interested in selling our mobile solutions."